Twitter, now known as X, has been ordered by a federal judge to proceed with a lawsuit filed by employees who claim the company failed to fulfill promised bonuses. The motion to dismiss the case was denied by the judge on Friday. X is accused of failing to deliver annual bonuses to its staff despite assurances from executives before and after the company's acquisition by Elon Musk in October 2022. The lawsuit was filed on behalf of employees in June 2023.
Mark Schobinger, formerly a senior director of compensation at X, filed a lawsuit in a San Francisco federal court after leaving the company in May. The suit is aiming for class action status on behalf of former and current X employees who did not receive their 2022 bonus. A federal judge recently ruled the case against X as plausible and allowed it to proceed.
"According to the ruling on Friday by US District Judge Vince Chhabria, Twitters offer to pay him a bonus in return is considered a binding contract under California law."
X, which has eliminated its public relations team, did not respond to CNNs request for comment. In its motion to dismiss, the company argued that an oral promise should not be binding and that the case should be heard in Texas. However, the judge stated that when determining whether a contract can be enforced, California law applies.
The complaint filed in June mentioned that employees had expressed concerns about their compensation and annual bonuses after Musk announced his acquisition of the social media company in April. Leading up to the deal closing, company executives had assured employees multiple times that their 2022 bonuses would be paid at 50% of the target, as stated in the complaint. The promise was reiterated after Musk acquired the company.
According to the lawsuit, X failed to pay out bonuses as promised, leading to Schobinger leaving the company in May due to "Twitters reneging on various promises it had made to employees, including its failure to pay promised bonuses."
